Banking Sector
Introduction
• Definition of bank:
“A bank is a financial intermediary which accepts deposits and in turn converts the deposits
into lending”
Functions of Bank
• Accepting deposit from people and others(deposit)• Lending money to public (loan)• Transferring money from 1 place 2 another• Credit creation• Acting as a trustee• Keeping valuable in safe custody • Investment decisions and analysis• Other types of lending and transaction
Banking Sector in India
Banking structure in India
Public
Bank of Maharashtra
Central Bank of India
Private
ING Vysya
Federal Bank
Co-operative
Saraswat Co-op
TJSB
Rural
Marathwada Gramin Bank
Thane Gramin Bank
Foreign
HSBC
Citibank
Reserve Bank of India
ROLE
FORMULATE AND
IMPLEMENT
REGULATE AND
SUPERVISE
MANAGE FOREIGN EXCHANG
E
ISSUE AND
EXCHANGE
BANKER TO
CENTRAL & STATE GOVT.
Current Scenario
• The Present Status • Major contributor• The percent contributed to the economy: 2.5%• Still dominated by Government Banks• Competition• Increase in share value
Current Scenario
Banks 1997 2009
Shares of new private assets 2.6% 15.2%
Average capital adequate ratio for consumers 10.4% 13.03%
Gross NPA’s for commercial banks 15.7% 2.3%
Returns on assets of commercial bank 0.4%(1991)
1.0%
Success : A road ahead…
Top 3 Private Banks of India
• Largest private sector bank in India • Total asset of Rs. 3,674.19 billion • Network of 1,600 branches with about 5000 ATMS • 21% Increase in profit after tax to Rs 8.78 billion in
Q1 2010
SWOT
Strengths• Market share• Huge network• Salary account• Working hours• Aggressive marketing
Weaknesses• High Transaction cost• Focus only on high end
customers• Poor customer
care/service
SWOT
Opportunities• Dissatisfied customers of
other banks• Bank –insurance services• Increase in percentage of
returns• Business advising for
smaller players
Threats• Advent of MNC banks• Dissatisfied customers• Ever improving
nationalized banks
• One of the first bank to be listed on NYSE in 2001• Among the first companies to receive an 'in
principle' approval from the Reserve Bank of India (RBI).
• Times Bank Limited was merged with HDFC Bank Ltd., in 2000
• The Bank has an network of 1,725 branches spread in 771 cities across India
• The Bank also has 3,898 networked ATMs across these cities
SWOT
Strengths
• Right strategy
• Great Brand Image.
• High degree of customer
satisfaction
• Good working environment
• Lower response time with efficient
and effective service.
• Dedicated workforce
Weaknesses
• Some gaps in range for certain
sectors
• Customer service staff need
training
• Management cover insufficient
SWOT
Opportunities• Scope to expand to larger
areas
• Potential to attract more customers from overseas
Threats• Very high competition
prevailing in the industry
• Lack of infrastructure
• Began operation in 1994
• Was earlier known as UTI Bank
• Total Income as on 31/03/2009 is Rs.13,745.04
crore
• Net Profit as on 31/03/2009 is Rs 1812.93 crore
• MD and CEO is Shikha Sharma
• Head Quarter in Mumbai
SWOT
Strengths
• Support of various
promoters
• High Level of Services
• Knowledge of Indian
Market
Weaknesses
• Low market Capitalization
• Not been able to Fully
position itself correctly
• Less Popular
SWOT
Opportunities
• Growing Indian Banking
Sector
• People becoming more
service oriented
• Global Market
Threats
• Competitors
• Future Market Trends
Future of Banking Sector in India
• Mortgages to cross Rs 40 Trillion by 2020
• Wealth management will be big business with 10x
growth
• The Next Billion will be the largest segment
• The branches to grow by 2x and ATMs by 5x
• Mobile Banking to see huge growth
• New Models to serve Small and Medium Enterprise
• Investment Banking to grow by 10 folds
Challenges
• Financial Inclusion
• The HR challenge in the Public Sector
• New entrance
• Technology
Future for an MBA
• Add new professionals
• Globally competitive market
• Deploy suitable strategies
Future for an MBA
Finance• Reorganizing the financial system • Improvise their nose-dived profit graph
Marketing• Market Investment Product• Direct selling agents
HR• Sustainability of bank• Challenges in recruiting, training, and developing
Conclusion
Thank You